On Friday the Chancellor added to an already unprecedented package of financial support for businesses, to assist with the impact of the Coronavirus pandemic. We have produced this short guide to set out our current understanding of the measures announced and to highlight the steps you should now consider taking.

1. cowgills.co.uk
Coronavirus and
your business
Update - 24 March 2020

2. Your next steps following
the package of support
announced by the Government
On Friday the Chancellor added to an already unprecedented package of
financial support for businesses, to assist with the impact of the Coronavirus
pandemic. We have produced this short guide to set out our current
understanding of the measures announced and to highlight the steps you should
now consider taking.
Please be aware that the information and guidance is changing on a regular basis. As we
receive further details and direction, we will continue to provide updates.
Coronavirus Job Retention Scheme
What does it mean?
The Government has stated that they will reimburse employers 80% of an employee’s salary
whilst employees are ‘furloughed’ (this generally means a temporary leave of absence from
work) during the Coronavirus Crisis.
• Employees that are to be furloughed will need to be designated as such and notified. It is
understood that the employees will need to provide their consent, but given the alternative
is likely to be redundancy, we expect that most employees will be accepting of a temporary
status change.
• Employees must not undertake any work for the employer (or we expect any other
employer) while furloughed to qualify for the scheme. The grants do not cover the wages of
employees working reduced hours due to the virus.
• Potential furloughed employees are those that would otherwise be made redundant. The
80% wage guarantee does not cover zero-hour contracts or casual workers, unless they
work via the PAYE system. Self-employed workers do not qualify for the scheme.
• It is not yet known if owners of small businesses who pay their own salary through a PAYE
scheme are covered if they furlough themselves. However, given that similar support is
expected imminently in respect of self-employed workers, it stands to reason that small
business owners operating a PAYE scheme for themselves, would be covered too. We will
seek to gain additional clarity over this as further information is released by The Chancellor.
• The rebate is capped at £2,500 salary per month and the relevant employee will have
needed to have been entitled to the salary on the 28th February 2020.
• The £2,500 may include employer’s NI and pension contributions, but this is not yet
clear. Therefore £2,500 may not end up being the precise maximum gross pay which
the employee receives, if for example, pension contributions are then taken into
account.

3. • The measure will be in place for at least three months.
• If the employer wishes to pay the 20% shortfall in salary they can, but it is not mandatory.
• We have also started to see some employers enforcing the use of holiday’s during the
furloughed period.
• There seems to be no cap on the number of furloughed employees declared per business.
• The scheme will be accessible for employers through an online portal (HMRC are still
working on this but it should be available soon). Once the employer accesses the portal,
they will need to provide details (this is likely to be name, NI number, salary etc) of the
affected furloughed employees and submit this information to HMRC.
• All payments will be backdated to the 1st March 2020 although the Government have
suggested that it will be late April before the system is fully operational with cash
reimbursements being processed.
• Not paying employees ahead of the rebate is likely to be a breach of employment rights and
could expose the business to legal challenge.
• It is not yet clear whether those employees that have already been made redundant as a
result of the pandemic, can be reinstated and the relief claimed.
• It is difficult to envisage how this will be policed but any abuse and subsequent wrongdoing
is likely to be met with the sternest sanction.
Next steps
We are waiting for further details from the Government on a daily basis and we will keep you
updated as information is released, but this is what we do know now:
• HMRC’s systems are set up to collect money rather than distribute it so it will take some
time to get the cash moving.
• If you are anticipating cashflow issues in the intervening period prior to reimbursement, it
will be necessary to find a short-term finance solution. Understanding your short term cash-
flow position is therefore vital.
• We would suggest that legal advice is sought if you are considering furloughing employees
as this would represent an amendment to an individual’s employment contract. Obtaining
the correct advice now will prevent issues later.

4. Deferral of VAT Payments
What does it mean?
All VAT payments have officially been agreed to be deferred between 20th March 2020 and
30th June 2020.
• This is no longer means tested and is an automatic deferment.
• VAT returns need to be submitted as usual during this period.
• Businesses will then have until the end of the fiscal year (31st March 2021) to repay any
deferred VAT.
Next Steps
• There is no need to make any VAT payments due between now and 30th June.
• File your next VAT return as normal.
• It is not clear whether a payment plan will be required after July to repay the deferred debt
over the remainder of the financial year. We will provide clarity on this as soon as we are
able.
• For any VAT that was overdue prior to 20th March 2020, we would advise that you speak
with HMRC in order to agree a repayment plan with them. They have set up a dedicated
COVID-19 helpline: 0800 0159 559.
PAYE, National Insurance Contributions, Time to Pay
What does it mean?
It is important to understand that the measures described above only relate to VAT payments.
At this time PAYE/NIC is still payable every month.
• There is however the aforementioned HMRC helpline which will consider any requests for
extended terms in light of COVID-19.
• TTP (Time To Pay) is historically “means tested” but HMRC has been at pains to point out
that the rules have been relaxed somewhat to take into account the COVID 19 impact.
Next Steps
• The best initial action is to call the helpline on 0800 0159 559. It is likely to be busy and
it may take time to get through but please be patient. There is a very good chance that
you will get a formal agreement in place and prevent interest and penalties for any late
payments. We have already had reports from clients who have followed this process and
had success.

5. • Historically, businesses were required to provide information to substantiate a request.
We believe that this has been relaxed at this time. You should however have the following
available:
• An outline of the business – size, number of employees, recent history, basic trading
information.
• A statement on why the business is currently experiencing cash flow pressures.
• What self-help (cash generation, preservation, mitigation) measures have been initiated.
• Action taken with suppliers and customers – payments on account, deferral plans etc.
• Description of your plans to get back to stability and return to paying HMRC liabilities
as and when they are due.
• Shareholder/Director support provided/available.
• Other sources of funding being considered.
• Although we cannot make any guarantees, our opinion is that a PAYE/NIC TTP is more likely
than ever to be agreeable by HMRC, as the sheer volume of requests will require them to
significantly scale down their historic decision-making criteria.
Coronavirus Business Interruption Loan Scheme
What does it mean?
The new Coronavirus Business Interruption Loan Scheme supports SMEs with access to
working capital (including loans, overdrafts, invoice finance and asset finance) of up to £5
million and for up to six years.
• The Government will cover the first 12 months of interest payments and any lender-levied
fees, so smaller businesses will not face any upfront costs and will benefit from lower initial
repayments.
• The Government will provide lenders with a guarantee of 80% on each loan (subject to
a per-lender cap on claims) to give lenders further confidence in continuing to provide
finance to SMEs.
• This scheme is being delivered through commercial lenders, backed by the British Business
Bank.
• Businesses eligible need to be UK based, with turnover of no more than £45 million per year.
Next Steps
• The scheme is now open for applications. To apply, you should talk to your bank or one
of the 40 accredited finance providers (not the British Business Bank although the 40
accredited finance providers are listed on their website: https://www.british-business-bank.
co.uk/ourpartners/coronavirus-business-interruption-loan-scheme-cbils/accredited-
lenders/ as soon as possible, to discuss your business plan.

6. • If you have an existing loan with monthly repayments, you may consider asking for a
repayment holiday to assist with cash flow.
• The full rules of the scheme are available on the British Business Bank website: https://www.
british-business-bank.co.uk/ourpartners/coronavirus-business-interruption-loan-scheme-
cbils/.
• Whilst the scheme isn’t yet fully operational, credit teams are currently requesting the
following as part of the application process:
• Financial forecasts (cash flow, P&L, balance sheet), highlighting the likely impact of the
virus.
• An understanding of any measures the business is taking at this time to reduce any
outgoings / overheads.
• Up to date financial information.
• More detail on the additional amounts required and an understanding of how this has
been arrived at.
• We would stress that lending decisions will be made based on the strength of the business
prior to the crisis, not at the point of loan application. However, lenders will need to be
comfortable that the business will be able to return to a position of strength in the long
term.
Self Employed
What does it mean?
The Government has come under intense pressure to make similar provisions for the self
employed that they have done for those in work. This pressure increased after the Chancellor
announced that the self-employed would not be covered by the Coronavirus Job Retention
Scheme but would have easier access to benefits to cover a drop in income.
The draft Coronavirus Bill 2020 now includes provisions for the self employed. If passed, this
will ensure that the net monthly earnings of (a) the self-employed and (b) freelancers do not fall
below 80% of that received over the last three years, or £2,917, whichever is the lower.
The intention is to top up self-employed pay in a similar way to the grants reimbursing
employers for 80% of employee’s pay. Boris Johnson’s spokesperson said yesterday: “We
understand the position the self-employed are in. We have always said we will go further when
we can and are actively considering further steps. We appreciate the urgency of the situation
and officials are working around the clock to find a well-targeted support package.” It is hoped
this will go to the Lords today, and we can deal with any amends at report stage tomorrow and
go back to MPs on Thursday - such that it comes into law by close on Thursday.”
Next Steps
• Our advice is just to keep up to date with the information via the GOV.uk website. We will
continue to provide further guidance as we receive it.

7. Our team can provide assistance
Cowgills are experts at helping businesses navigate turbulent times. Whilst this is an
unprecedented situation, there are a number of services and suggestions we can provide to
help your business:
• Support with cashflow modelling and sensitivity analysis, ensuring you have visibility of the
pinch points in your cash cycle and can plan accordingly.
• Provide funding advice and access to funds through both Government backed and other
commercial lenders.
• Advise on negotiating a creditor stretch to make money go further.
• Negotiate with HMRC to delay PAYE, VAT and Corporation Tax payments.
• Help to shape Business Continuity Plans and IT infrastructure to support remote working
practices.
• Look at tax efficient strategies to recoup much needed money for businesses such as R&D
and Capital Allowances.
The full effect of Coronavirus on UK businesses is not yet known and may take some time to
be fully realised. In the meantime, we encourage you to keep an eye on the British Banking
Website for funding updates and further Government announcements. We will also continue to
provide commentary and information to further support businesses, so please follow our social
platforms and keep reviewing our website.
Should you require any form of support then we urge you to contact your usual relationship
partner or any of the following members of the team as early as possible, even if it is just for an
initial chat to look at the options available. Please call the office on 01204 414 243 or email:
Jason Elliott -Partner and Head of Business Recovery
jason.elliott@cowgills.co.uk
Lisa Wilson - Partner and Head of Tax
lisa.wilson@cowgills.co.uk
Sam Davies - Corporate Finance Partner
sam.davies@cowgills.co.uk
Ben Day - Business Funding Director
benjamin.day@cowgills.co.uk

8. Bolton
45-53 Chorley New Road, Bolton BL1 4QR
01204 414 243
Offices also at
Manchester, Ilkley and Liverpool
enquiries@cowgills.co.uk | cowgills.co.uk